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Build-to-rent model a ‘win-win’ in challenging conditions

18 February 2019 Tim Neary
For rent

The build-to-rent model is a “win-win” for both property owners and tenants, one expert has said, because rental income can be earned from the start and tenants are lined up and ready to go.

The Property Investors Alliance has said that the model holds “significant” opportunity for property developers in today’s “challenging” market, while also providing a solution for housing supply.

PIA founder and managing director Justin Wang said that it is a viable system that will work effectively in Australia.

“It’s not the panacea for affordable housing, but it is a solution for the current state of play in the development industry, as well as addressing social housing and tenant welfare,” he said.

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Mr Wang said that the asset is built to be tenanted, and therefore owned by a single or multiple investors.

He said that there is a “considerable” opportunity for the model.

“The build-to-rent model also offers an excellent investment proposition for developers and institutional investors as it provides a secure and stable model which works in both the tenant and the investors’ favour.”

He said that the model minimises risks in the property development landscape for all involved — the developer, the financier, the occupier and even the government — by providing more affordable housing options.

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A build-to-rent model was launched in Greater Western Sydney late last year, following established similar models in both the US and Europe.

Head of property and investments at Kanebridge, who undertook the development, Michael Martin, said at the time that the model had been established to provide affordable modern housing for those unable to purchase property of their own.

“Multifamily build-to-rent has the advantage of providing consistency to tenants, both in terms of rent in the latest amenities.”

Mr Martin said that the development offered tenants a “vast array” of benefits and inclusions.

“Each lease will give tenants an option to upgrade or downgrade to an apartment in another development as changes in their personal circumstances may dictate, without incurring punitive charges.”

Build-to-rent model a ‘win-win’ in challenging conditions
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